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Wednesday, February 5, 2014

A law suit between the city of Providence and the Ohio Casualty Insurance Company stands to be an important case, and not just for the city.

Providence is seeking to get insurance payments from the Ohio Casualty Insurance Company (OCC), the company that insured the city against losses caused by former City Clerk Sara Stevens. OCC is claiming that, despite the fact that the city paid their bill every year, the policy only pays for a single year’s losses. Stevens was convicted of embezzlement over the years of 2001, 2002 and 2003.

In October of 1997 OCC issued the surety bond to the City of Providence, in which it agreed to indemnify Providence up to the sum of $300,000 for losses caused by various acts and omissions attributable to then city clerk Sara Stevens.

“Providence subsequently terminated Stevens’ employment in May, 2004, upon discovering that Stevens had embezzled city funds in excess of $300,000 over a period of several years,” Appeals Judge Joy A. Moore wrote in a 2012 decision.

“It took a couple of years to get the first $300,000,” said Providence Mayor Eddie Gooch. He added that at that point OCC felt that it’s obligation to the city was complete. City officials disagreed.

“The city felt that the bond insurance company owed us two more years,” Gooch explained. “They tried to say that it was a one year thing.”

In a May of 2012 decision, the court sent the case back to Webster County Circuit Court over what seems like a technicality.

According to that ruling, Judge Joy Moore and the other two judges on the panel did not like the wording of the lower court’s decision. So the decision was rewritten and sent back to the appeals court.

“I think the court of appeals could have said that it was the obligation of the appealing party to be sure everything was in order, and decided in the city’s favor,” said Providence City Attorney Richard Peyton. “But instead they sent it back to the lower court.”

Judge Williams changed the wording the court had not liked, and the case went back to the Kentucky Court of Appeals. The second time, with a different set of appeals judges, the outcome was totally different.

“We disagree with the trial court’s conclusion that the city thought it was buying $300,000.00 of coverage for each successive year of Stevens’ service as clerk,” Judge Christopher Nickell wrote in the appeals court’s decision. “That may well have been the city’s wish and desire after the losses were revealed, but there was no credible evidence they bargained for such language on the relevant date—October 1, 1997.”

Peyton said that the city had filed for a rehearing due to a mistake they allege Judge Nickell made in his decision.

“Things go according to their own schedule,” Peyton said. “If the Court of Appeals has a large work load, you have to wait a long time. If they have a light load you might get a quick decision.”

Regardless of how the petition for a rehearing goes, it could still be some time before Providence would potentially see any money. Regardless of whether the city gets a rehearing or not, ultimately whoever loses the appeals case will most likely seek to move the case to the Kentucky Supreme Court.

“This is a case that the supreme court would have to decide if it was important enough to take into consideration,” Peyton explained. This process will be handled though a discretionary review.

As snow and cold weather return to the area, state officials have begun to show concern for the shrinking levels of propane across the Commonwealth.

30 states have declared propane energy emergencies since propane supplies hit their lowest level ever during the second week of January.

The governor’s office, Kentucky Emergency Management and the Energy and Environment Cabinet are working together with federal agencies and the Kentucky Propane Gas Association to stay informed of our propane issues.

Last week House Committee Natural Resources & Environment Chair Rep. Jim Gooch of Providence heard testimony on what had created the situation. That meeting cited four main reasons for the drop in propane levels.

•Record grain harvests across the upper Midwest occurred late, which meant everyone harvested at the same time. Because the season was wetter than usual, more propane was needed to dry the grain. In 2012, 65 million gallons were used. This year 300 million gallons were needed, which reduced propane below normal levels heading into the heating season.

•A major pipeline in Canada was temporarily out of commission from November until December 20th, which supplied 40% of propane to Minnesota. Railroad re-routing and other infrastructure problems hampered other exports from Canada, forcing upper Midwest and Northeast marketers to look further for supply.

•High overseas prices caused an expansion of the amount of propane being exported. In October of 2012, 189,000 barrels a day were exported. In October of 2013, 408,000 barrels were exported.

•Much colder than normal winter weather has caused a severe rise in petroleum demand. Customers are consuming greater quantities of propane and suppliers cannot keep up with demand.

“Certainly all of these factors - weather, pipeline breakdowns, soaring demand and price volatility and multiple uses for propane from home heating to commercial uses - have created a perfect storm for propane shortages,” said Rep. Gooch. “These unfortunate series of events show us just how critical ‘all’ energy sources are to our daily lives. As elected officials, we must ask ourselves if we could see the same developments in natural gas supply shortages as we are being forced to shift from coal to natural gas for base load electricity generation. Natural gas prices have more than doubled since we started this switch some 24 months ago and industry experts are questioning whether we are building adequate natural gas pipelines to the power plants at the rate we are announcing planned shutdowns of coal fired generation. Not asking these questions as we move away from our most abundant, reliable and affordable resource of coal could have disastrous consequences for our citizens.”

Rep. Gooch has filed House Bill 63 that would require retail electric suppliers to maintains 30- day supply for electricity generation.

“Propane is a very tight comodity right now,” said Greg Simpson the general manager of Southern States. “Nobody really saw this kind of winter coming. But we’ve been able to stay in propane at Southern States.”

Simpson said that Southern States, with local offices in Clay and Slaughters, has managed to keep gas in their pipeline by contracting it rather than buying on the market.

“It’s been a struggle to keep the pipeline full,” he said. “I’ve heard of other companies around the area that haven’t been so fortunate.”

Simpson said that although Southern States has been able to keep customers supplied, they have been unable to take on new customers. He estimates the shortage will last another 35-40 days.

“The Kentucky Propane Gas Association (KPGA) is working with its national affiliate to ensure expedited shipments of propane by all modes: pipeline, rail and transport,” KPGA wrote in a statement on their website. “Efforts are underway with the U.S. Department of Energy to acknowledge that an emergency exists not only in our state, but throughout the nation, as consumers and businesses in dozens of states are faced with higher energy costs due to persistent cold weather.”

In January Governor Steve Beshear waived federal requirements on propane suppliers to expedite transporting the fuel. He has said he will continue to waive those requirements until the situation is under control.

Kentucky Attorney General Jack Conway’s office was contacted by residential and commercial customers in western Kentucky who had difficulties getting a release from United Propane Gas and its affiliates. The Attorney General contacted UPG and they volunteered a general release for customers they could not accommodate. The Office of the Attorney General will continue to monitor UPG and customers who have difficulties with their propane suppliers should email rateintervention@ag.ky.gov or call the Propane Supply Complaint Hotline 1-866-592-2556.

“I will continue my efforts to stay up to date on the propane problem and other energy issues and will share new information as it becomes available,” said Rep. Gooch.

On Friday, an armed man fleeing from local law enforcement resulted in Providence Elementary School being placed on lockdown. After a two hour manhunt, the subject was located and arrested at his own home and the school resumed it’s normal activities.

According to a press release issued by the Providence Police Department, Chief Brent McDowell responded to a call at 9:50 a.m. of an armed man at a residence on North Green Street. As McDowell arrived on the scene, the subject fled the scene on foot.

The man was identified as Providence resident Michael Sigler.

According to Webster County Assistant Superintendent Riley Ramsey, the suspect never attempted to enter the school, or was never even on school property. The lock down was a precaution.

“He is the father of a child at Providence,” Ramsey said. “We decided to lock the school down to keep our students and staff safe.”

The Webster County Sheriff’s Department, Kentucky Fish and Wildlife Officer Todd Jones and a Webster County Constable Mark Turner assisted Providence police officers in a search of the area.

At approximately noon the suspect was located barricaded in a room of his residence. He was taken into custody without incident, and then transported to Baptist Health Emergency Room in Madisonville as a precautionary measure.

Sigler was charged with 1st Degree Fleeing and Evading Police and four counts of 1st Degree Wanton Endangerment.

Assistant Superintendent Ramsey said that Providence Principal Greg Bowles was “outstanding” during the situation.

“Mr. Bowles and the tech staff monitored the situation on both the inside and outside security cameras,” Ramsey reported. “All students remained in their classrooms, and the cafeteria sent sack lunches so they would not go hungry.”

The annual Sebree city audit showed lots of ups and downs, but overall Sebree ended the 2012-2013 Fiscal year with a general fund surplus for the first time since 2010.

The bulk of the city’s revenue came from taxes, which showed an increase of $31,000 from the previous year. Property and motor vehicle tax revenue for the year actually declined, but the city saw a $28,000 increase in the insurance tax.

“You never know what the insurance tax is going to be until you get it,” said city auditor Jud Royster.

Overall expenditures for the year were down, but that data is a bit misleading. The actual drop was in the Capital Outlay funds, which are grant fueled programs for things like waterline and road repair. Sebree’s revenue for the 2011-2012 Fiscal year were considerably higher as well, due mostly to the same issue.

In all actuality the city’s expenses went up, mostly in General Governmental expenses. Those expenses saw an increase of $30,000, toping out just under $300,000, making it the second highest of the last ten years.

General government expenses have shown a steady increase over the last ten years. The 2003-2004 fiscal year showed general governmental expenses of just under $150,000.

Another costly item for the city is it’s utilities, which have shown a deficit for five consecutive years. For this fiscal year the city saw a loss of $179,000. A year ago that amount was only $93,000.

This year’s gap was so large partially because, as expenses increased, income from the utilities declined by $20,000.

“I think that is because of the way you changed billing,” Royster said. “I think with your billing changes and the increases you made to your water rates, that should correct itself.”

The utilities also saw some added expense during this fiscal year as the city purchased equipment to upgrade to radio read water meters.

The city council accepted the fiscal year audit unanimously. Council member Brenda Margelot was absent.

Members briefly discussed a waterline rehabilitation project that the city has proposed. The application is currently with the Division of Water, and the city expects to know if they’ve gotten approval this week.

Sebree area farmer Keith Tapp was honored recently by the Kentucky Soybean Association by receiving their highest honor, the 2014 Distinguished Service Award.

“This award is the highest honor given by the Kentucky Soybean Association and it is not given lightly,” said outgoing Kentucky Soybean Association President, Davie Stephens, at the organization’s recent Kentucky Commodity Conference, held in Bowling Green. “He’s done it all willingly, and he’s done it all well. This man is a great example of what a farmer-leader ought to be.”

“I had no idea he was talking about me,” Tapp said in an interview later that evening with Rae Wagoner, Editor of the Kentucky Soybean Sentinel. “That is the biggest honor we give and even though it’s a secret who gets the award until it’s announced from the podium that night, when I heard Davie start speaking I thought I knew who he was talking about. I was happy for that guy, because he works so hard on behalf of soybean farmers in our state and internationally. Then Davie said a couple of things and I thought ‘hmmm. I don’t remember him serving on that,’ but I still never dreamed that he was talking about me.”

Opportunity for service and the need for leaders has increased dramatically in agriculture over recent years, and the role of the farmer-leader has diversified. International marketing, biodiesel, meeting with legislators in Frankfort and Washington, D.C., setting policy for the American Soybean Association and helping to lead action teams for the United Soybean Board are all things that Sebree farmer Keith Tapp has done in service to his fellow farmers.

Tapp has served on both the Kentucky Soybean Association Board (a position to which he was elected by his peers – other soybean farmers in this region of the state) and the Kentucky Soybean Promotion Board (an appointed position) in a variety of roles intermittently since 1983. He has received a variety of awards for his service, including the Eddie Voils Distinguished Service Award. He currently serves as one of Kentucky’s two representatives to the United Soybean Board, the soybean checkoff’s national arm, where he was selected to serve this year as Vice Chairman of the Audit and Evaluation Action Team. He has also represented our state at the national level with the American Soybean Association, the legislative and member-driven side of the soybean coin.

Tapp has served as Kentucky’s representative on national boards and committees for everything from the farmers’ freedom to operate to soy-based biodiesel, and he brings what he learns at the national level back to Kentucky’s soybean farmers.

Tapp said that he is honored and thankful that KSA chose him for its highest honor, but that the attention is rather overwhelming.

“There are a lot of names on that plaque who have done a whole lot more than I have,” he said, “but to be honored like this, well, it’s a really big deal to me and I could not have been more surprised.”